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Tuesday, 21 September 2010

Professor of finance at University of Chicago Raghumam Rajan, takes Paul Krugman to task over numerous errors relating to the origins of the financial crisis. Not least is his demonstration of the ways Fannie and Freddie, and the government policies that drove them, were relevant.

This gem, for example, is delicious since it shows Krugman's ongoing intellectual dishonesty, as his explanations shift.

Critics were quick to point out that Krugman had his facts wrong.

As Charles Calomiris and Peter Wallison of the American Enterprise Institute (Wallison is also a member of the financial crisis inquiry commission) explained, “Here Krugman demonstrates confusion about the law (which did not prohibit subprime lending by the GSEs), misunderstands the regulatory regime under which they operated (which did not have the capacity to control their risk-taking), and mismeasures their actual subprime exposures (which he wrongly states were zero).” ... So, Krugman shifted his emphasis.

In his blog critique of a Financial Times op-ed I wrote in June 2010, Krugman no longer argued that Fannie and Freddie could not buy subprime mortgages. Instead, he emphasized the slightly falling share of Fannie and Freddie’s residential mortgage securitizations in the years 2004 to 2006 as the reason they were not responsible.

Here again he presents a misleading picture. Not only did Fannie and Freddie purchase whole subprime loans that were not securitized (and thus not counted in its share of securitizations), they also bought substantial amounts of private-label mortgage-backed securities issued by others. When taking these into account, Fannie and Freddie’s share of the subprime market financing did increase even in those years.

Rajan goes on to shred Krugman a half-dozen more ways from Sunday. The whole piece is well worth a read.

In the end, as the Grand Poobah says in The Mikado, it's nice to have my opinions confirmed by an expert.

Monday, 20 September 2010

Hello Everyone. At this Tuesday night's meeting of the UOA Economics Group we will begin looking at the financial crisis and specifically at the lessons we can take from it. In last week's seminar we concluded looking at the boom-bust cycle, also known as the business cycle. It is not surprising that the current 'bust' has resulted in many asking what caused the current downturn. Many theories have been put forward. But are the real villains being put in the spotlight? Or are innocent parties being blamed? Was there too little regulation? Or too much? These are very important questions, because the way the politicians and policy-makers answer them will affect every single one of us for many years to come. Join us tomorrow night to help form your own view.

PS: If you have been unable to join us for a while, you don’t need to worry about not following the discussion. Each seminar is somewhat independent of previous seminars. Also, don‘t worry about being left behind. The discussions are for both students and non-students of economics. And you don’t have to be enrolled at Auckland Uni either—everybody’s welcome. Date: Tuesd ay 21th September Time: 6pmRoom: University of Auckland Business School, Owen G Glenn Building, Room 317 (Level 3)

A new survey suggests concern about climate change has slipped slightly from a year ago. The UMR Research poll done on behalf of the Greenhouse Policy Coalition … said climate change rated bottom in order of importance to people out of a list of 10 common issues – a drop from eighth out of nine issues in the same survey last year. Those issues in 2010 were (in order of concern) cost of living, health, education, ethics in business, environment, effect of the economy on household, taxes, employment, standard of living compared with other countries and climate change. The proportion of people agreeing that climate change was a serious issue fell from 42.6 per cent last year to 36.3 per cent, the survey showed.

Although he said he supports taking action to reduce carbon emissions, Gwyn Prins said government policies have done little to achieve that goal. "The best climate change policy is no climate change policy," he said.

No wonder, perhaps, that in a bid to get back the mojo for big govt action on global warmingclimate change whatever-the-hell-it’s called this week,

Invercargill gets a snowfall of this weekend's magnitude every 10 to 15 years [says Andy Fraser, a forecaster at 45 South Weather Service based in Invercargill], but he would not class it as a freak event. The city is prone to watery snow because it's close to the coast, unlike inland areas which get lighter snow.

Friday, 17 September 2010

IT’S SAID OFTEN ENOUGH in coaching circles that no matter how well you train someone in a new style of play—changing their golf swing, improving their kicking style, remedying their bowling action—when push comes to shove in a pressure situation, they’ll revert regardless to what they do instinctively.

So it is with this National-led Government who, when the chips are down, revert to what they know best. Big Government.

Their legislative response to Canterbury’s earthquake is a classic illustration of what I mean. Maintaining that "we need to be able to … remove bureaucracy that would slow up” rebuilding, you need to understand that by “we” here they intend not you and me, but themselves. The bureaucracy they have removed is from them.

To those now expressing surprise at the dictatorial powers they have now granted themselves I say, “Why be surprised?” Because when the rubber that is an earthquake meets the road that is economic reality, you really do see what implicit conviction a governing party really does hold. And whatever their stated principles might suggest about their convictions, enough clues have already been scattered throughout this government’s term to quite easily determine their real, implicit convictions.

EXAMPLE NO. 2: “Fibre to the home.” Announcing that the ability for every home to download porn is crucial to this country’s development, this government then continued the meddling in the telecommunications market begun by the last government (ensuring no sane investor would risk their own money on any sort of large-scale fibre network) before announcing the government itself would risk several billion of our tax dollars (that’s $1.5 billion plus cock-ups) by undertaking this important mission itself.

EXAMPLE NO. 3: How about what Rodney Hide is doing in National’s name in Auckland, undertaking “local government reform to “get the city moving.” How will a super-sized bureaucracy (staffed with super-sized egos) do that, you might ask? Simple, says Rodney Hide. It will give one mayor and one unified council undreamed of power to dictate what happens from Pukekohe to Warkworth—a megalomaniacal concentration of bureaucratic power “focussed on big picture issues” paid by big city rates, all to make sure the trains run on time.

Are you getting the picture yet?

This is a government that does want to see the country moving forward. Let’s give them that much. But when push comes to shove, and despite their stated principles of “maximum freedom and the avoidance of unnecessary controls,” the freedom they seek is not for you and me, it’s for them. And the avoidance of unnecessary controls is not for the entrepreneurs, investors and businessmen and women who actually do drive the creation of wealth—it’s for themselves and their bureaucrats.

on how Governments are not good at innovation – tried that in an experiment known as the Soviet Union. Said innovation happens in all the companies and firms that are represented at this conference, and the Government’s job is to try and facilitate a supportive environment.

He said all that out of one side of the mouth, while out of the other he was telling the audience how excited he is about the government’s $1.5b urban fibre project, and the urgency of (and votes in) “advancing the rural fibre project….”

And by “advancing,” he means risking bucket-loads of your money on something no private investor can yet see a profit in. Not, at least, while the govt talks like this.

LET ME SAY IT again. Despite their stated small-govt principles, the only agent for change this government takes seriously is Big Government. The only agent who knows best, they assume, is Big Government.

Every important reform or undertaking this government has undertaken since it came to power has been an expression of that same inner conviction. RMA. Smacking. National Standards. A new War on P. Three Strikes. Boot Camps. DNA Testing. Car Crushing. Infrastructure Spend-Up. Auckland’s Local Government Reform. Fibre to the home. The Canterbury Reconstruction (All-Powerful Govt) Bill. . .

From the first hundred days to now, it’s been one sopping seamless stream of state worship. So why should anyone be surprised now when Gerry Brownlee adopts the mantle of Nero and National supporters like David Farrar start writing encomia to benevolent dictatorship.

THE IRONY OF CHEERLEADER FARRAR being the first one to openly and enthusiastically embrace the dictatorial implications of the Brownlee Brownlee Enabling Bill was lost on few people. After all , as everyone from The Standard to Kiwipolitico to David Slack points out (“Reading Kiwiblog on ‘wise dictatorship,’ you'd think Thomas Jefferson never put quill to paper,” said Slack) , today’s chief blogetic cheerleader for dictators was 2007’s leader of the campaign against the Electoral Finance Act—a campaign whose ads argued that Helen Clark’s attack on free speech in the EFA put her on a par with dictators like Frank Bainimarama, Robert Mugabe, and Mao Zedong.

How quickly a manatee changes its spots.

But so too, it must be said, have many of those once former advocates of the Electoral Finance Act who now talk so nobly about Thomas Jefferson and the virtues of small government.* As Craig Ranapia said in jest about the complaining going on about the Bill over at Public Address, “I’m shocked how close you commies are to forming an Ayn Rand book club.”

How quickly commies change their spots too, eh, when it’s not their team who’s in power.

Wherein, perhaps, lies a lesson that the various party cheerleaders might think about when they go home at night to their various book clubs. We’re very far from ever having any serous constitutional restraints on governments in this country, more’s the pity. But how about those who are in power, and those who support them, begin by imagining how much power the the legislation they do write will give to the other team should they ever get back behind the Treasury benches.

That at least might exercise the small fibres of small-government thinking still residing in what they call their brains, sufficiently perhaps that these sentiments might burst forth at times other than just their party conferences, or when they’re in opposition.

[* CLARIFICATION: David Slack reckons “you'll find that you'll search high, low and in vain to find anything I've ever written advocating the EFA. I could be mistaken, but I'd be mightily surprised.” e’s not so sure about the commies, but. ]

the continuing radicalisation’ of the neoliberal project… which "works toward" the final triumph of the unregulated market.

A remark that represents either astonishing blindness or a capacity to believe two impossible things before breakfast, since if his own favoured party was packing on the same power this one is he’d be first out there in the cheer squad.

Mind you, this is the same Chris Trotter who, when his own favoured political regime was at the top table and extorting your money to find their election campaign , wrote a very long and learned piece arguing that this ransacking of the public purse for their electoral war chest was “justifiable” or “acceptable corruption.”

Which I guess, given the symmetry with Farrar’s “I Heart Dictators” post this week, makes him something like Farrar’s alter ego. Or maybe his Red twin.

Scoop: Your Government rammed through the Super City and disestablished the Canterbury local government. One of your Ministers released personal information on people who complained about their policies. Is authoritarianism your answer to everything?

Brownlee: I wouldn't say that.

Scoop: I know you wouldn't say it, but is it true?

Brownlee: I don't think it's very fair.

Scoop: Well can you think of any problem you wouldn't solve with authoritarianism?

Brownlee: Well, I, for example if my problem was I wanted a cup of tea, I might boil the jug or I might ask someone to make some for me.

Scoop: And if there wasn't any tea?

Brownlee: Well, if it was like that I suppose I would go for the authoritarianism.

Scoop: Perhaps you'd commandeer some tea?

Brownlee: Obviously I'd have to suspend the Crimes Act first otherwise it would be stealing. But look, that's not reason to go around calling us names. Some might say that's hampering the reconstruction effort.

was not based around whether or not the building had been designed by a registered architect, but "who was the architect." "I maintain that the building was designed by an architect, and I quote Webster's Concise English Dictionary, "a person who designs buildings and supervises (their) erection."

Unfortunately, the architects who are happy about this do not rely on dictionary definitions but legal definitions—in particular that of the Architects Act 2003, which disallows anyone from calling themselves either “architect,” “registered architect,” or from doing anything in any way that “may reasonably cause” any person to believe that he or she is an “architect” unless he or she is a member of the old boys club NZ Institute of Architects.

Yes Virginia, this is protectionism.

The argument of the Real Estate Agents Authority however (which is naturally on all fours with that of the NZ Institute of Architects) is that

There is a general perception that houses designed by architects are very well designed and of a higher than average quality, or desirability, and that these houses command a premium price in the market place because of these factors.

This is pure cant.

In an open market anyone should be free to call themselves an architect “who designs buildings and supervises (their) erection,” any buyer of houses should be free to decide whether or not their work has earned a premium.

The guild protectionism of the Architects Act 2003 makes this impossible however.

During the consultation over the Architects Act 2003, a number of us argued, as I did, that the only title that should be protected by the Act is that of “registered architect,” leaving it to advertisers to market houses designed by “registered architects” and to the open market to decide whether or not the work of Institute members was demonstrably better than that of those who weren’t—and to registered architects themselves to demonstrate that the title “registered architect” is one to be earned and respected on its merits.

That members of the NZIA instead lobbied vigorously to support the anti-competitive protectionism of the wording we now have suggests that they themselves harbour doubts as to the worth of their own members on an open market.

This is not just history. Because the NZIA, in conjunction with the Master Builders Federation and a succession of know-nothing Ministers of Building, is now about to impose on everyone in the building industry that they either be licensed or registered or they can get the hell out of the industry.

The argument for this is that licensing and registration of every man and his drawing board will somehow protect against the construction of future leaky homes.

That the vast majority of high-profile leaky projects were designed by registered architects and built by master builders might tell you otherwise. And that the real reason for the move is that the guild protectionists have won. And so they have.

So not every architect is happy this morning. Just the registered ones and their guild.

Thursday, 16 September 2010

Charles Voysey didn’t like being called a pioneer of modern architecture, but he was.

He didn’t start the spatial revolution that so many twentieth-century architects did so well, but he did strip back needless frippery from the English House and stress the honest materials and the craft of his houses, which usually featured white pebble-dashed walls, prominent chimneys, huge pitched roofs and windows grouped into “ribbons.”

This was his own house, designed in 1899 for Chorleywood, Hertfordshire—about ten miles west of London. Poet laureate John Betjeman said “I think it was the parent of thousands of simple English houses.” And so it was—which is why it might be so hard now to see it with the eyes startled with which startled Edwardians might have seen it.

You’ll realise that in homeopathic potions the “active” ingredient is so dilute that less than one molecule of it appears in solution—and extraordinary claims are made for this expensive bottled water.

Realising the power of this scam these products, a savvy vendor has brought a homeopathic iPod to the market at TradeMe—an obviously extraordinary product at a price that is either eye-watering or a bargain, depending on your view of homeopathic scams medicine. And worry not, it ticks all the homeopathic boxes:

This iPod has had all the electronics from the inside removed. It looks like a regular iPod, but the inside has retained a memory of the electronics that were present. Unlike standard iPods, this one will not damage your hearing - definitely no side effects… The music cannot be heard or detected by any scientific equipment, but there are hundreds of testimonials saying how good the sound quality is. According to homeopathic theory, the fewer electronics, the more powerful it is, so this iPod will store every mp3 every made. It makes 16GB memory look like a drop in the ocean

Get your bids in now!

And keep an eye out for the first homeopathic iPad to come onto the market. It’s bound to attract some hefty interest.

David Patrick Farrar, author of the popular Kiwiblog and self-describedly at the liberal end of the National Party, confesses this morning that in his quiet moments he sometimes yearns for the iron fist of a political dictator. Coincidentally, his confession is posted just as the National-led government bring in sweeping near-dictatorial powers to “deal with” everything arising from the Canterbury earthquake, and then some.

In modern history, a dictator is seen as an evil bad ruler – Hitler, Stalin, Kim, Hussein etc. They have absolute rule for life. We definitely do not have that sort of dictatorship. But a long time ago, a dictator was seen in positive lights – in fact some dictators are seen as democratic heroes….

Mark this on your calendar. September 16, 2010: the day David Farrar expressed his support for dictatorship.

If you’ve caught up with the news recently, you’ve probably heard breathless reports of a study suggesting Voltaren, Cataflam and other similar anti-inflammatory drugs may significantly raise the risk of strokes.

There were a number of large caveats with this … study, not the least being that it was a crossover study with all the attendant risks of population studies that are not prospective. This is the same sort of study that suggested a link between cell phone use and cancer, only to be disproven by better constructed studies… The evidence, at least to me, does not seems to be convincing or damning.

Kitchens aren’t what they used to be—not that you’d know it from the antiseptic grey and mirrored offerings in the trendy magazines and most of the kitchen showrooms.

Kitchens are the place wherein the products of fire, light, earth and water are combined to become food; a place of experiment and sustenance. In the modern house, the kitchen is the crucial hinge, linking family room, lounge dining room, breakfast space, BBQ area and more—and should open up to morning sun for breakfast, afternoon sun on the deck for barbecues, and mid-morning sun for coffee. Yet in this most important space, where more money is spent per square metre than anywhere else in a house, “the kitchen industry - and kitchen designers - have to own up. The kitchens most people end up with look depressingly similar.” And dull. And unable to really do what a kitchen should: support the essence of the kitchen

In The Art of Kitchen Designhe talks about The Sociable Kitchen as being a place like a combination of Great Hall and the Great Kitchens of yor, but much better equipped and more fun to be in. Not so much just a kitchen that you need to hide away, as a living room in which you can cook, i.e., "open plan living environments that unite social, practical functions and the outdoors in one multi-functional hub."

My belief [ says Grey] is that the kitchen is effectively a sociable space, its origins lie in the hearth; cooking and eating are largely group or family activities; when done alone they become purely functional and provide a somewhat incomplete experience that is better for being shared."

The Sociable Kitchens Grey has pioneered are places that are pleasant in which to cook, to hang out, and to pass through—even (you might say especially) in relatively narrow or constrained spaces.

Part of his method is that, rather than making "straight-line" kitchens that everyone will recognise as “the kitchen!”, he uses instead specialised pieces of furniture--often with curved or "soft" edges--each carefully located to perform a major kitchen function (e.g., storage, prep, serving, appliances) and linked to the scale of the space. In a carefully designed kitchen (such as his own, in a remodelled garage), this might mean the preparation area might represent no more than 40 percent of the floor space--"the remainder being devoted to a comfortable and sociable lounging area... and integrated dining area, and a play space for our four children. This," he says, "is typical of [our] recent divisions of kitchen space."

The concept involves something he sometimes calls “the unfitted kitchen,” especially suitable for spaces like the one shown here through which people will be moving to other related parts of the house. Unfitted, today, means unrecognisable as a kitchen, allowing the sociability of the space to come to the fore. In Grey's designs these “unfitted kitchens” often involve a lot of curved elements (rather than straight) to reduce the visual presence of the units, and the presence of different units at different heights, from 700 right up to 950 (rather than continuous benchtops all at the same height) to help break up the normally monolithic kitchen furniture and invite people in.

The main thing is to embrace people rather than exclude them, something today’s traditional straight-line fitted kitchens do poorly.

In a sociable kitchen you want lots of places to perch, and more work areas facing people than facing walls. In the traditional galley or U-shaped kitchens, however, this can be difficult, if not impossible.

Because as well as all the links to spaces beyond, the kitchen also needs to accommodate both the ideal work-flow of a main "inner" kitchen (i.e, storage -> prep -> sink -> cooker -> serving -> eating -> dirty dishes -> dishwashing -> crockery/cutlery storage) and the needs of the "outer" kitchen (e.g., snacks, sandwhiches, tea, coffee, cocktails) without either impinging on the other.

With Grey’s concept of the unfitted kitchen, the specialised pieces needed to do that can placed just right, needling less space and giving more delight than the normal "straight-line" kitchen layout.

As he says himself, "the science of marketing has taken over to a large extent when it comes to the design of our kitchens today," especially when it comes to the idea that size and straight-line continuous bench tops--made of the finest Italian marble--are the answer in today's kitchen.

During the 1980s [and beyond], kitchens were created where you could not have conversations because the work surfaces faced the walls, showroom spaced, clad in plastic with shiny surfaces and matching doors. Domesticity was too old fashioned or simply too difficult to mass produce… The focus [in designing kitchens] should be on creating spaces for living, eating, prepping and cooking. Instinct tells us everything we need to know. We want to be in a room because it feels like home. A kitchen has simple needs: modest-sized, freestanding furniture pieces for each major function (like cooking, prepping and washing up), minimal countertops, a walk-in larder and a storage cupboard or two, a decent table, access to the outdoors and panoramic eye contact. And don’t forget about a place to make a mess, have a drink, chill out, experiment, and generally behave like you live there. So throw out your matching units, continuous counters and matching doors with repetitive handles. You have nothing to loose but convention, and everything to gain. More space, less cost, more of you in the surroundings and less of being self consciously stylish, more playing with colour and use of vintage pieces. Enjoy discovering your inner interior designer.

And re-discovering even a tightly-constrained kitchen as a place to enjoy, rather than endure.

Wednesday, 15 September 2010

Now that Christchurch mayors and councillors have been granted overnight almost imperial powers to reconstruct what they see as their fiefdoms, it might be time to begin asking whether they and their appointed team are up to it. Clearly, expecting mayors and councillors to reconstruct anything themselves is quite simply ludicrous. But even to expect them to manage and “regulate” professionally is almost as laughable.

Their experience with sewage is instructive. While spending hundreds of millions on projects inflating their own importance, their plan for the city’s sewage involved nothing more than doubling the number times and locations at which it dumped the city’s sewage into he Avon and Heathcote rivers. Lovely.

The experience of the recently built Christchurch Civic Centre is even more instructive. In a $120-million fit of grandomania back before the 2007 local elections, the Christchurch City Council commissioned the reconstruction of the former Chief Post Office as its new home—with the man now appointed "architectural ambassador" for the reconstruction, Ian Athfield, as the designer, and Ngai Tahu, the city’s landlord, as the owner.

As Christchurch businessman Hugh Pavletich writes, the Resource Consents for the work were rushed through without the public consultation council require of anyone else; the new building was not built to “essential building” status as it was required to by the very Building Code the council administers (a status used for buildings like hospitals requiring such structures to be useable after a quake); and, once it was finished, the rents agreed to by council for leasing the building their ratepayers had paid to rebuild were nearly fifty perfect more than are paid fro arguably superior space (council pay $435 per sqm for the privilege of occupying the space they’ve rebuilt; while IRD pay $330 pr sqm for arguably superior space).

So, not so professional then.

Then come last week after the earthquake, this $120million palace-- which the Building Code the council themselves administer requires be designed to still be functional after a quake—wasn’t functional at all. The IRD building was. Much of the city was. But the council’s new Civic Center was out of order and facing a repair bill of at least $5 million, forcing the council’s clipboard carriers to relocate to “a suburban service centre” to announce their “new policy” on old buildings “ that may have the unintended consequence of making buildings too expensive to repair.”

The irony obviously escaped these experts. Because it looks very much like their own building wasn’t built to the standard the council themselves are supposed to ensure. Scuttlebutt has it that the money and energy was spent instead on making this a "Green Building" with a 6 star rating. Something to trumpet in the next glossy mail-out to ratepayers, and to use to get invites to expensive functions overseas. It achieved only a 4.5, however, but it’s not unreasonable to assume this focus (and the costs involved) likely compromised the functional and structural performance requirements.

Remember, these are the people granted the “power of general competence” by the Local Government Act, the people who last night were given imperial powers over Canterbury, so it’s worth examining this particular failure further, and how it hindered what council were supposed to be doing last week. Says Pavletich, reporting on the aftermath

Mayor Bob Parker and the Council have not conveyed to the public the significance of the damage [to their Civic Centre] – and, most importantly, how this building failure seriously impaired the 1,200 Council administration staffs ability to function following the earthquake of 4 September. While Parker was creating the impression in the media that essential services were responding, in reality, because of the new Civic Building failure, the Council’s administrative capacity had collapsed… The Council staff were unable to enter the building to mobilize the needed response. This necessitated the setting up of a small "Recovery Team" in the nearby glass Art Gallery [designed by Warren & Mahoney. Many of the 1.200 staff were sent home for at least a week...

So much, perhaps, for the idea that people need council flunkies “directing” them in times of disaster. Because they weren’t.

Due to these major problems with the new Civic Offices, the infrastructure staff on the ground were extremely slow to respond. Many of these people were not adequately operational until the Monday. Even then, because the administrative staff could not access their computers, files and maps, staff on the ground were left standing around, as they tried to ascertain where other services were, prior to digging. City Care, the Councils infrastructure maintenance arm, had about half its equipment still idled in its Milton Street yard on the Tuesday. In contrast, the performance of the Fulton Hogan people and those from the power network Orion in particular was outstanding. There was much spontaneous community and commercial response to this event. Young Sam Johnson, the law student at Canterbury University deserves special mention for his outstanding initiative, in rallying well more than 1,000 University students to get out there and assist people in the community. In contrast, it would appear the Council did not even have a Zonal Earthquake Management Plan in place, to mobilize a response at the community level. The Council did not send building inspectors out to the pockets in the liquefacted residential areas within the North East quadrant of the city until the Thursday following the event. The priorities from the outset should have been (a) human life (b) housing (c) commercial. Mayor Parker failed to understand this - with his focus on the CBD and heritage. It was surreal - indeed odd.

Odd unless you realise this is election season. And that a mayoral candidate looks much better filmed against inner-city rubble than outer-suburb liquefaction.

This is what people are saying in Christchurch about the people just granted sweeping powers--power to have Nero Gerry Brownlee suspend laws on their behalf so they can order other people to do things they want done, while prohibiting folk from doing what they don’t want them doing. It’s almost laughable.

1. The report, in the CHRISTCHURCH PRESS - “Recovery law cuts red tape”– “Emergency legislation rushed through Parliament has given the Government extraordinary powers to rebuild Christchurch. Faced with a massive damage bill and an uncertain future for many home and business owners, the Government says it needs the powers to get the city back on its feet as soon as possible.”

The reality: The government awards itself massive unbridled powers; places itself above laws such as the RMA and District Plans enforced by ferret-faced council bureaucrats, under which our freedom to act is crushed on a daily basis; exempts itself from scrutiny, accountability and liability for its actions; and blocks even our courts from challenging any of its decisions, under the guise of rebuilding Christchurch.

The problem: This is a draconian power grab, which will strengthen the power of the state at the expense of our liberty. This is an over-the-top reaction to a natural disaster, an opportunity for the government to seize for itself the power to impose its will on the people of NZ. The country is not at war; we are not under threat from foreign invaders or an armed insurrection from the populace. Yet our freedoms have been eroded; and this law may never be repealed. The government has decided it can ignore crap laws such as the RMA, Public Works Act, Local Government Act, and Building Act. But hang on - weren’t these laws necessary for our protection? Suddenly the government decides they weren’t that necessary after all. Why not get ditch these laws then, instead of having one rule for politicians and another for the rest of us peasants?

Brickbat: To ACT – where was the “liberal” party while the government were rushing this legislation through in the middle of the night? Marching lockstep with their National masters, that’s where, like the faithful lapdogs they have become.

2. The report, in the NZ HERALD – “Cuba Cuts 500,000 State Jobs” – “Cuba has announced it will cast off at least half a million state workers by early next year and reduce restrictions on private enterprise to help them find new jobs - the most dramatic step yet in President Raul Castro's push to radically remake employment on the communist-run island. Because unemployment is anathema in a communist society, state businesses have been forced to carry many people who do almost nothing. The labour overhaul comes less than a week after Fidel Castro caused a stir around the globe when he was quoted by visiting American magazine writer Jeffrey Goldberg as saying Cuba's communist economy no longer works.”

My reaction: – After fifty years of oppression, this could be the beginning of the end for the Communist dictatorship in Cuba, the Carribean equivalent of the dismantling of the Berlin Wall. It will be interesting to see whether the Castro government will allow the sort of privatisation and freeing up of trade that has seen China become the world’s fastest growing economy. Watch this space.

Bouquet (partial): To Raul Castro, for facing reality. He should be encouraged to push further and hold free elections in Cuba.

CLAIM, John Banks: “I am probably the only mayor in Auckland to have contained rates within council's rate of inflation every year I have been in office.”

FACT:Rates have risen 5.1 per cent, 2 per cent and 1.9 per cent during his term … [and] council debt [increased ] from $322 million to $867 million. He also voted to raise $12 million in bus lane and parking fines over this term...

His main opponent in the battle to control Auckland’s new super-sized bureaucracy is no better.

CLAIM, Len Brown: Rates bills will increase by no more than the rate of inflation during my first term as Manukau mayor (election promise, 2007).

FACT:Rates have increased by 4.9 per cent, 4.8 per cent and 3.9 per cent this term…

So one has racked up nearly one billion dollars in debt while talking about containing costs, and the other just hasn’t got a clue. Would you give either of these two fuckwits the steam off your used credit card? Let alone the keys to the biggest bureaucracy Auckland has even seen? Thanks to Rodney Hide however and to the Local Government Act that gives them virtually open slather to sate their egos with our money and property, come November, you will have.

PS: Look forward to a huge jump in rates next year, whatever happens, especially in Manukau, Papakura, North Shore, and Waitakere where “rates increases of 100 per cent or more” are “a real possibility” in order to pay for the profligacy of John Banks’s council. Thanks again, Rodney hide.

It was not a victory for free speech because, unlike the rest of the western world, New Zealanders are still considered too immature to be allowed to know the names of sex offenders, frauds, and other assorted criminals before our courts—and Justice Harvey has now confirmed that even hinting in public about the names of those people can see you bailed up in court and given a large fine and a stern talking to.

In New Zealand, very often, justice may not be seen to be done, nor to whom it is done. And that remains the case. The courts themselves have seen to that.

But it was not a victory for free speech because Cameron dropped the ball.

Breaking a bad law on principle and taking your lumps for it is a time-honoured form of civil disobedience. Just ask the suffragettes. Or Rosa Parkes. But you’ve got to carry the ball to the line, making your case in court on principle.

Cameron didn’t do that. He wriggled. His lawyers wriggled. They talked about his depression. About how suppression orders don’t apply to blogs. About how he didn’t choose this as a crusade, instead someone chose to crusade against him.

Just as it was to read Justice Harvey bewailing the lack of official “oversight” of the blogosphere in his 70-page judgement.

Unlike newspapers which are subject [sic] the oversight of the Press Council or advertisers who are subject to the Advertising Standards Authority or radio and television which is subject to the Broadcasting Standards Authority, there are no similar regulatory organisations in place in the “blogosphere.”

Harvey says this like it’s a bad thing. I trust Simon “FIGJAM” Power and his colleagues and supporters don’t see it that way too.

I would hate the likes of Jeffrey Palmer, for example—who has never seen a committee, board or tribunal he hasn’t wanted to join—to sit in judgement upon a blogger who has decided that Palmer has a face that needed punching. But that’s where Harvey’s comments are either intentionally or inadvertently headed.

So this was not a victory for free speech.

We bloggers have been told off. We may not consider ourselves above the law. We may, subject now to the constrictions laid down by Harvey J, continue to post what we like and what we think. For the moment. But a trial balloon has been quietly floated. And to shoot that down we will need more than just harpoons.

UPDATE: See what I mean:

“The judgment [says media lecturer Martin Hirst] probably puts a little more pressure on the government to respond to the Law Commission report on regulation of the Internet…”

There was a fascinating spectacle in Parliament yesterday. Fascinating in several respects.

First of all, in talking to the Christchurch Reconstruction Bill, we were witness to an extraordinary unity of purpose among the MPs of all parties. We heard, for example, the man who seems to fancy himself a permanent thorn in government's side, Clayton Cosgrove, declare uninhibited support for the Bill--and tell the House its passage was so important that he was "not going to play politics with it."

Which is rather revealing of how he sees politics normally, really. And rather begs the question of just how seriously his opposition to virtually everything else done by this government should be regarded.

But it really was an extraordinary afternoon. We even heard tributes from usually brawling adversaries to one another. If one continued to listen to Labour's Cosgrove, for example, we could hear him actually paying tribute to National's Gerry Brownlee, and even to Gerry Brownlee's relatives.

How rare an event this is can be seen as a measure of how rare the passage is of such a bill.

The Bill really is extraordinary. In order to allow Cantabrians to rebuild their province without hindrance, it suspends virtually every law that Parliament has ever written apart from the Bill of Rights Act and the Electoral Act--from the Building Act to the Resource Management Act to the Commerce Act to all the other niggardly prohibitions on economic activity that hamper, restrict and strangle economic life.

If only the rest of the country could enjoy the same exemption from the exigencies of the grey ones as Canterbury, you might think. Finally, after a week of hell, they can finally feel themselves blessed.

Or so you might think. Except a swift perusal of the Bill reveals that the people being freed up are not the entrepreneurs, businessmen and developers who move a city forward, but the very grey ones themselves who get in their way. It’s these people who are being given unprecedented power to tell everyone else what they should be doing, unrelieved of any legal constraint.

Which is really very revealing of just how these Parliamentarians from every party view the nature of human life and economic progress, and who drives it.

UPDATE 1: Normal transmission has been resumed on Twitter. Comment from a commie:

Dear Gerry Brownlee, you seem confused. We asked for the suspension of your flabby corpse, not the suspension of habeas corpus.

Which in just 140 characters explains what was just passed better than a thousand encomia from Clayton Cosgrove.

UPDATE 2: Taken from the Bill, this is what politicians mean when they say they’re “removing bureaucracy that will slow things up”:

The recommendation of the relevant Minister may not be challenged, reviewed, quashed, or called into question in any court.

My best guess is that the government actually really doesn't know what bits of legislation would get in the way of rebuilding so it's given itself the power to void all of it. Which kinda points out that it might just have been a bit too complicated for us regular folks to get building consents prior to the Quake.

Stuff reports: “Emergency legislation rushed through Parliament has given the Government extraordinary powers to rebuild Christchurch.”This isn’t quite accurate. The legislation gives the government extraordinary powers to do – almost – anything it wants to anywhere in New Zealand.

It isn’t the potential for gross draconian tyranny that may be the real problem. Rather, it is the possibility that the powers might be applied to fix “problems” that really aren’t the fault of the earthquake at all… Again, I’m not saying Gerry Brownlee (or any other Minister) consciously intends misusing these powers. But once you give a man a hammer, suddenly everything starts to look like a nail. And so it is with Ministers and the power to remake law swiftly and decisively.

Tuesday, 14 September 2010

Another guest post from my Christchurch correspondent, complete with pictures taken over the last few days.

Let me make a plea for Christchurch. And for good journalism.

Watching the media coverage of the Christchurch earthquake, one could understandably conclude that the entire city had been razed to the ground, all the city’s buildings, roads and houses reduced to rubble, and the entire population is now reduced to boiling up stones for soup while dodging falling masonry. Not so.

Why wouldn't they believe that trope, however, when the media are acting as paid doom-mongers and unpaid promoters of pessimism. Right from the very first morning, when the media erupted into print with reports of looting (reports that surprised friends in the city who saw shops with open doors but never any looters, not one) they have continued using emotionally charged but wildly inaccurate phrases to describe our still lovely town as an “earthquakeravagedcity”—even when they’re only writing a story about an All Black test!

businesses like McDonalds and Subway, to whom she supplies, were looking to Australia for their gherkins under the assumption that her business had been destroyed in the earthquake. Burnett said they had no idea that some of Christchurch was still standing.

And it’s not just other businesses who are reading the bad reporting. Tourists are looking to delay or cancel holidays to Christchurch fearing, after seeing the coverage of the disaster, that their destination lies in ruins. Yesterday, for example, I reassured an Aucklander who was about to cancel their trip that contrary to reports of our demise the vast majority of the city is in good working order and open for business. They were relieved to hear that they could continue their trip as planned.

This is not to belie the disaster or ignore the tragedy, nor the significant structural damage that the earthquake has caused and continues to cause. However, as these photos can only hint at, this is not a city on its knees. It has had a severe shake, but this is not Pakistan or Port au Prince. The vast majority of Christchurch weathered the earthquake extremely well, thank you very much, and our garden city is as beautiful as ever and is open for business.

Don’t believe half of what you hear. Come down and see for yourself!

UPDATE: More up-to-the-minute photos below of the “quake ravaged city,” courtesy Christchurch photographer Kurt Langer. (And just quietly, he and his fully-equipped studio would appreciate a commission or two at the moment, since much of the work he did have on has now disappeared. Contact him at mail@kurtlanger.com with your commissions, or for permission to republish.)